I am interested in a deal where there are 5 single family homes as a package. Fully rented. All are in good condition, rehabbed (fully gutted) about 3-5 years ago.
This would be my first deal getting into rental investing in US.
Purchase price: 270k
Currently rented for: 3500/month
Expenses: 600/month (taxes, insurance, utilities < water for one unit)
Prop Mgt: 300/month
CapEx/Rainy day: 230/month
Vacancy: 175/ month (5%)
Debt service: 1090/ month (@5% interest)
Total: 2500 (approx)
Cash Flow: 1000/month (200 per door)
Downpayment: 70k (25%)
Cash on Cash: 17%
What are the downsides of such a package against a multifamily unit?
I will have to go with a commercial loan. Since there is a limit of 4 total houses in getting conventional loan, would this commercial loan of 5 units close doors on me for getting conventional loans for my future acquisitions?